Qantas draws plan to lure China travellers

Qantas Airways, seeking to revive unprofitable international operations, is counting on five different airline units to win travellers in China, a country 60 times bigger than its home market of Australia. The company is forming a premium carrier in Southeast Asia and a budget venture in Japan that will give it bases closer to China, Chief Executive Officer Alan Joyce said in an interview in Sydney on Tuesday. The two new airlines, which begin flights next year, will add to Qantas' existing operations in Vietnam, Singapore and Australia. "There is a huge opportunity for Qantas within the Asian markets," Joyce said. Having premium and low-cost units serving China and the rest of the region is "critical", he said. Winning sales in the world's most populous country is central to Joyce's plans to turn around overseas operations now losing about $207 million (Dh760.31 million) a year because of competition from Middle East carriers on European routes. Delta Air Lines and American Airlines also added flights to China, where international air travel may grow 11 per cent a year through 2014, according to the International Air Transport Association. "I really think it is hard to overestimate China's potential," said Peter Harbison, chairman of the Sydney-based CAPA Centre for Aviation, an industry adviser. The country's size and rising intra-Asia trade provide "unbelievable upside internationally", he said. Sydney-based Qantas, Australia's largest airline, will order as many as 110 Airbus A320s, including 78 of the revamped neo version, to support the new Southeast Asia premium carrier and the Japan budget venture. It announced the new international airlines last month alongside plans to pare flights to Europe and shed 1,000 jobs in Australia. The workforce cuts bolstered calls by unions for job-security agreements limiting the airline's ability to hire specialists, including pilots, for the new Asian carrier. First strike Qantas' long-haul pilots this year won regulatory approval for what would be their first strike since 1966, and engineers are implementing one-hour work stoppages until December. Qantas fell 0.3 per cent to A$1.49 at the close of Sydney trading. It has declined 41 per cent this year, compared with a 28 per cent drop for the Bloomberg World Airlines Index, which tracks 30 stocks.